Microeconomics |
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To interpret the equation, let's go back to the budget line of Fig. 8.1. Let's first
check that the budget equation that we have derived in Table 8.1 delivers the
graph of the budget in Fig. 8.1. Begin by setting Qm equal to zero. In this case,
the ...
To interpret the equation, let's go back to the budget line of Fig. 8.1. Let's first
check that the budget equation that we have derived in Table 8.1 delivers the
graph of the budget in Fig. 8.1. Begin by setting Qm equal to zero. In this case,
the ...
˹éÒ 184
Look at the new budget lines in parts (a) and (b) of Fig. 8.2. In part (a) ... Notice
that the new budget line in part (b) has the same slope as the new budget line in
part (a). Let's now see what happens to the budget line when income changes.
Look at the new budget lines in parts (a) and (b) of Fig. 8.2. In part (a) ... Notice
that the new budget line in part (b) has the same slope as the new budget line in
part (a). Let's now see what happens to the budget line when income changes.
˹éÒ 190
At that point, she is on her budget line and so spends her entire income on the
two goods. She is also on the highest attainable indifference curve. Higher
indifference curves (such as /2) do not touch her budget line, and so she cannot
afford ...
At that point, she is on her budget line and so spends her entire income on the
two goods. She is also on the highest attainable indifference curve. Higher
indifference curves (such as /2) do not touch her budget line, and so she cannot
afford ...
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